India announced that it plans to join the worldwide wave of steel protectionism by imposing trade tariffs. The Indian government said it will impose 12% safeguard duties on steel products to safeguard its domestic market.
India revealedit will impose trade tariffs on a broad range of steel products to protect its domestic market from increased imports from the East. The announcement came after Trump announced he would impose duties on all US imports.
India follows Trump in protecting domestic markets from imports
Trump announced last week that he would impose trade tariffs against Canadian, Mexican and Chinese imports. The US president said the move would help boost the domestic market and improve its industries.
Trump added that the tariffs encouraged companies to invest in countries within the United States. He commented that the higher the tariffs, the more likely companies would move into the US and produce jobs.
India’s commerce ministry proposed temporary safeguard duties of 12% on various steel products. The ministry said the safeguard measures were used during increased unfavorable and unforeseen imports.
It added that the increased imports threaten to cause permanent damage to the domestic industry. The country joins other European and Asian countries in seeking tariff relief from Chinese imports. China’s property crisis has increased its exports, causing a flood of metal products with little demand.
India’s trade authority said the proposed tariffs on Indian imports would be applied for 200 days in its preliminary decision that followed an investigation. It added that it would give its final ruling after 30 days of consultation and a public hearing.
Shankhadeep Mukherjee, principal analyst at CRU Group, said that the domestic market was showing increased capacity. He added that there would be some support due to the new duties. Steel Authority of India Limited shares recorded a 5% increase shortly after the announcement. Tata Steel Limited increased by 2.9%, while Jindal Steel & Power Limited rose by 2%.
The ministry said the nation is in a critical circumstance, and any delay in applying the safeguard measures will cause damage that will be difficult to repair.
India’s government also noted China is making more steel than it needs domestically. It added that the exports increased to a nine-year high in 2024. It identified the impacts of the multiple trade safeguards worldwide and the slowing demand across Asia.
Analysts warn US tariffs on steel imports could push more supply to India
Moody Ratings, a financial analytics firm, issued a warning saying that the US tariffs on steel would increase competition and lead to oversupply at other steel-producing markets. Hui Ting Sim, assistant vice president at Moody Ratings, warned that Indian steel producers will face increased challenges in exploring their products.
According to data from the Global Trade Research Initiative (GTRI), US steel and aluminum imports increased despite the trade war commencing in 2018. The data indicated that primary steel imports reached $33 billion in 2024, a $2 billion increase from 2018.
Canadian imports amounted to $7.7 billion, while imports from Brazil rose to $5 million. The data also revealed that Mexican imports to the United States amounted to $3.3 billion. Imports from China and India remained at $550 million and $450 million, respectively.
GTRI founder Ajay Srivastava said that Trump’s tariff strategy was predictable. He said that if the US president followed the playbook, the tariffs could be used in trade negotiations. The founder added that the 2018 tariffs were a strategy to force trading partners into concessions. He said the current tariffs could lead to new trade disputes and reciprocal measures from the target countries.
The Organization for Economic Cooperation and Development (OECD) predicted that Trump’s tariff hikes would drag down growth in Canada, the US and Mexico. It added that US households would pay a direct price from the new import taxes, which could cause an economic slowdown in the country.
The European Union, Mexico and Canada responded to Trump’s tariffs by issuing reciprocal tariffs on US-imported goods.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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